TOPICS > Politics

U.S. to Lift Embargo on Palestinian Government

June 18, 2007 at 8:10 AM EDT

JIM LEHRER: Aid for the Palestinians. We start with some background narrated by NewsHour correspondent Kwame Holman.

KWAME HOLMAN: Secretary of State Condoleezza Rice made the announcement at the State Department this afternoon. After a week of civil warfare tore the Palestinian unity government in two, with Hamas controlling Gaza, and Fatah, led by Palestinian Authority President Mahmoud Abbas, ruling the West Bank.

Rice threw United States’ support and financial aid behind Abbas, who swore in a new government yesterday. Today’s announcement marks a reversal from 18 months ago, when the U.S., European Union and Israel blocked funds to the Palestinian Authority after Hamas won legislative elections.

CONDOLEEZZA RICE, U.S. Secretary of State: We intend to lift our financial restrictions on the Palestinian government, which has accepted previous agreements with Israel and rejects the path of violence. This will enable the American people and American financial institutions to resume normal economic and commercial ties with the Palestinian government.

We are also reviewing our democracy and development assistance to help the new government build institutions and infrastructure that will improve life for Palestinians, that will provide essential services, better roads, and clean drinking water to people in need.

We have previously identified up to $86 million to support President Abbas’ efforts to build responsible security forces. Now, in light of the new Palestinian government, we will be working with Congress to restructure that assistance so that it can be used effectively.

JOURNALIST: Can Mahmoud Abbas really negotiate on behalf of all his people if he’s effectively only representing half of them?

CONDOLEEZZA RICE: Well, let’s remember that Mahmoud Abbas is the president of all of the Palestinian people through the Palestinian Authority. He is also the head of the PLO. These are the institutions of the Palestinians as a whole.

JOURNALIST: Fatah leaders have been corrupt in the past. By resuming aid, do you think that there’s a danger that you’re propping up a system and leaders that have been proved to be corrupt and a system that has been proved in the past not to work?

CONDOLEEZZA RICE: Well, first of all, we have been very strong advocates of political reform in the Palestinian political space, including Fatah reform. And that needs to proceed, and I’m certain that it will. But I think, if you look at this government, and particularly if you look at its prime minister, you see someone who has a reputation for integrity, who has a reputation for having accountability.

KWAME HOLMAN: The announcement came a day before Israeli Prime Minister Ehud Olmert was scheduled to meet with President Bush at the White House. Olmert also has urged more outreach to and support for Abbas’ new government.

The impact of renewing aid

Martin Indyk
Saban Center for Middle East Policy
I think the desired end result, Margaret, is to show that moderation and negotiations produces a much better result than violence, terrorism and what Hamas calls "resistance."

JIM LEHRER: Margaret Warner takes the story from there.

MARGARET WARNER: What will be the impact of the Bush administration's decision to resume financial and diplomatic ties with the Palestinian government? For that, we turn to Martin Indyk, a former assistant secretary of state for Near-Eastern affairs and twice U.S. ambassador to Israel during the Clinton administration. He's now director of the Saban Center for Middle East Policy at the Brookings Institution.

And Robert Malley, who was special assistant to President Clinton for Arab-Israeli affairs and a director for Near-Eastern affairs on the National Security Council staff, he's now Middle East program director at the International Crisis Group.

Welcome, gentlemen.

Martin Indyk, is this the right move on the part of the Bush administration? And if so, to what end?

MARTIN INDYK, Saban Center for Middle East Policy: I think it is the right move. I think that the secretary of state did two very important things today. The first was, as your clip showed, renewing the aid and recognizing the new government with a prime minister who is committed to not only transparency and integrity, but also to living in peace with Israel.

The second thing she did was to say that this was not a question of dividing the Palestinian people. There's only one Palestinian people. And the United States was going to provide $40 million in humanitarian assistance immediately through the United Nations to Gazans, so as to make sure that people understood that we were not playing a game of building up the West Bank at Gaza's expense. And I think that that is an important message, as well.

MARGARET WARNER: But let me see if I understand what the end result, the desired end result is here, because Secretary Rice didn't really say.

MARTIN INDYK: I think the desired end result, Margaret, is to show that moderation and negotiations produces a much better result than violence, terrorism and what Hamas calls "resistance." There is, in a sense, a struggle for power and a competition for two different visions of Palestine. One an Islamist vision, and the other a secular vision, one at peace with Israel, and one replacing Israel.

And so what's at stake here is that I think that the United States, Israel, the E.U., the Arab League, also, all understands that, if they want to prevent the West Bank from going the way of Gaza, then they have to show that Abu Mazen, the Palestinian president, Mahmoud Abbas, can actually deliver for a much better future for the Palestinians than what Hamas is promising.

Questions about long-term strategy

Robert Malley
International Crisis Group
You can't have a cease-fire in the West Bank if you don't have the Gazans that are buying into it. You can't have a political process that's focused on the West Bank if Gaza and Hamas do not feel in some ways part of it.

MARGARET WARNER: So Rob Malley, do you think it's the right move to restore credibility to the forces of moderation within the Palestinian entity?

ROBERT MALLEY, International Crisis Group: Well, first of all, of course, it's the right move to resume assistance and to resume diplomatic relations. Frankly, that should have been done a long time ago when there was a national unity government.

That's not the question for me. The question is, is this a long-term strategy? And where will it lead? And, unfortunately, I think it is not. I don't think it's a long-term strategy; it's at most a band-aid, because you can't have stability in the West Bank if you don't have stability in Gaza. You can't have a cease-fire in the West Bank if you don't have the Gazans that are buying into it. You can't have a political process that's focused on the West Bank if Gaza and Hamas do not feel in some ways part of it.

And, finally, you can't have a Palestinian president who, despite the words of Secretary Rice to the effect that he is president of all Palestinians, you can't have him being focused on the West Bank, getting money mainly for the West Bank, and still claim creditably to be the president of all Palestinians, which is what Mahmoud Abbas wants to be.

So I think this is a strategy that cannot work in the long run because ultimately Fatah and Hamas are going to have to come together if they want to provide security and stability and if they want to have a credible political process.

MARGARET WARNER: But are you saying, even in the short to middle term, the scenario laid out by Martin Indyk can't work, that is that there's sort of a demonstration effect on the West Bank of what it can mean if you have a Palestinian government that is accepted by the West and that gets help from the West?

ROBERT MALLEY: Well, I'm skeptical for several reasons. I think there are many actors in the West Bank. The West Bank is not a mirror image of Gaza, where Fatah has the upper hand. The West Bank has long been chaotic, anarchic, and that's why Israeli forces to a large extent are there, in any event.

And so the notion that you're going to have paradise in the West Bank with security, which will allow Israel to remove the checkpoints and remove some of its security restrictions, seems to me to be somewhat of an illusion. So I fear that, if Hamas considers that this is directed against it, it will do what it can and it will have a lot of allies in that effort to destabilize the situation in the West Bank, thereby making it impossible for both material improvements and political improvements.

The future of the West Bank

Martin Indyk
Saban Center for Middle East Policy
But the government that has been set up now, the emergency government under Salam Fayyad, is a government for all the Palestinian people.

MARGARET WARNER: Martin Indyk, do you agree that Hamas is likely to try to destabilize anything Abbas does in the West Bank? And is Abbas strong enough, both politically and personally, to take advantage of this opportunity if, in fact, it is one?

MARTIN INDYK: I think it's important to understand that the United States didn't start this fight, that the rivalry and the struggle for power between Hamas and Fatah is something that has been going on for a long time. And it was Hamas who decided to take control using the power of the gun in Gaza.

And we saw how they did that, in such a mafia-style, thuggish takeover, not that Fatah are any angels by any means, but I think it's important to understand that they are engaged in a struggle for the future of Palestine. And the question is, what can we do to promote a peaceful resolution of this conflict, in a situation where there is this fratricidal kind of rivalry?

We don't have many good options. But I think that the fact that there is an emergency government now that we can deal with, that others can deal with, and we can get past this issue of recognition of Israel, there is a chance that what happens in the West Bank can also be done in different ways in Gaza and so that the Palestinians generally will come to understand that they're better off with a moderate government that wants to make peace with Israel rather than one that wants to destroy it.

Now, what Rob says about the West Bank is no doubt true, although I think Fatah is certainly stronger there than in Gaza. But the government that has been set up now, the emergency government under Salam Fayyad, is a government for all the Palestinian people. They will be getting money to pay salaries not just for West Bank civil servants, but for Gazan civil servants, as well.

So the challenge will be to Hamas as to how they're going to, in effect, govern Gaza, when the legitimate government recognized by most of the world will actually be supporting the public service there.

MARGARET WARNER: Rob Malley, what do you think the impact of this will be on Gaza and on Hamas' ability to govern in Gaza?

ROBERT MALLEY: Well, it's a good question. And if, as Martin says, in fact, money will be going to pay the civil servants in Gaza, if it won't be strangulated and isolated, then perhaps some arrangement could take place there, or Hamas will say, "We will maintain calm, restore law and order," which hasn't existed in Gaza, "in exchange for allowing us to govern through the money that comes from the international community."

Again, I don't think that's the frame of mind that exists either here or in Israel, where many seem to think that you should isolate Gaza in order to really contrast two situations, the situation in the West Bank and the situation in Gaza, one governed by Fatah, the other governed by Hamas.

I don't think that that's the way forward. And just to remind people, Fatah has a better ideology from our perspective than Hamas, but most of the acts of violence that have been committed against Israel since the election of Hamas have been performed by Fatah offshoots, that you have a lot of division within Fatah, which is not really an organization anymore.

So the notion that Mahmoud Abbas and Salam Fayyad could restore order in the West Bank when the polity is so divided seems to me to be quite a stretch.

Peace process with Israel

Robert Malley
International Crisis Group
So you're going to have to get to the point where Hamas sees it to be in its interest to allow Mahmoud Abbas to negotiate with Israel and to do it in the name of all Palestinians.

MARGARET WARNER: Finally, I want to ask you both -- and we don't have a lot of time -- but beginning with you, Martin Indyk, can any strategy for encouraging the forces of moderation among the Palestinians work without a pretty quick renewal of some kind of serious peace process with Israel?

MARTIN INDYK: I do think that's very important, but let me just quickly say, Margaret, that, in order to exercise effective control in the West Bank -- the Israelis are doing that at the moment -- if they pull out, we're going to need an international force in there to do the job instead. But that would have to be in the context of a peace negotiation you've suggested here, and I assume that President Bush will be discussing that with Prime Minister Olmert tomorrow.

The secretary of state has already talked about the importance of a political horizon, and I think that, given that the West Bank is the only territory in contention now, since Israel is already withdrawn from Gaza, that it does make sense now to focus on what I would call the "West Bank first" arrangement, for trying to work out a Palestinian state with the West Bank being the model and international forces coming in to take control there or to help Abu Mazen exercise effective control there.


ROBERT MALLEY: Political process by all means, but I would say...

MARGARET WARNER: You mean peace process?

ROBERT MALLEY: Peace process, by all means. But to have a peace process, you need a leader who is viewed as credible and legitimate by the entire polity or at least by the vast majority of it. You can't have a powerful faction, as is Hamas today, openly and violently trying to torpedo it.

So you're going to have to get to the point where Hamas sees it to be in its interest to allow Mahmoud Abbas to negotiate with Israel and to do it in the name of all Palestinians. It may be doable, but it's going to mean going back to some form of power-sharing arrangement between Hamas and Fatah, and the United States, because we shouldn't ever do any harm in this regard, we should not stand in the way of that future power-sharing agreement.

MARGARET WARNER: Which will certainly present the United States with another choice to make. Rob Malley and Martin Indyk, thank you both.


MARTIN INDYK: Thank you.